SHELL IN NIGERIA

23-09-2011 Loes Altena Martin Belej Katarina Jablonick Fanny Latarche

Agenda
Situation Shell in Nigeria Critical success factors Current problems Ethical principles Ethical principles & Shell Alternatives

Situation Shell in Nigeria (1)

Start of operations in 1937 Joint venture between BP, Nigerian government and Shell in 1973 Shells share: SPDC Nigerian government: NNPC Per barrel Share Division of profits
Costs Shell Elf/Agip Goverment $ 4.50 $ 0.70 $ 0.30 $ 9.50 $15.00 30% 15% 55%

Situation Shell in Nigeria (2)

Mid 1990s 60% of oil reserves 5000 employees 930.000 barrels of oil a day Net income of $235.000 Usage of Niger Delta land of 0.3%

Critical Success Factors

Industry
Exclusive rights to prospect for oil Joint-venture

Strategy
Cash calls system Organizational culture

Environmental
Government dependency on oil industry

Rockart & Bullen (1981)

Current Problems (1)

Politics Governmental instability & corruption Military in politics Socio economic conditions of Nigeria Social pressure groups Ethnic tensions & conflicts

Current Problems (2)

The exploitation of oil by Shell in the Niger Delta is contested by the Ogoni people (tribe in Niger Delta) Environmental issues caused by exploitation Fair share of operation

Current Problems (3)

The Trial MOSOP & the Bill of Rights
The right to the control and use of a fair proportion of Ogoni economic resources for Ogoni development. The right to protect the Ogoni environment and ecology from further degradation.

Saro-Wiwa
They are going to arrest us all and execute us. All for Shell.

Ethical Principles
"It pays to be ethical!" The principle of equality Just institutions Rights and duties Principle of integrity Responsibility

Ethical Principles and SHELL

Equality principle
Unfair treatment of defendants j Responsibility Rights and duties Rigged trial Any precautions held to Deprived rights prevent the radical of Shells lders actions stakehothat followed Just institutions j Rights and duties Deprived rights of Shells stakeholders

Principle of integrity
None superior sets of standards over the required minimum

Acts based on the laws of the local institutions Promotion of The Good supressed

Alternatives (1)
Do Nothing  Accordance with Shells business principles  Avoiding conflicts with Nigerian government Severe criticism Tension between Shell and the Ogoni tribe

Alternatives (2)
Extensive Lobbying  Complies with moral obligations  Apolitical impression Criticism Tension between Shell and the Ogoni tribe Unlikely to succeed

Alternatives (3)
Pressuring the Nigerian Government  Future relationship with the Ogoni tribe Possible conflicts with the Nigerian government Inconsistency with Shells business principles No real leverage Unethical

Alternatives (4)
Releasing an Official Public Statement  Positive public image  Future relationship with the Ogoni tribe  Publicizing the trial Contempt of court Inconsistency with Shells business principles

References
Rockart, J. and Bullen, C., 1981. A primer on critical success factors. Center for Information Systems Research Working Paper No 69. Sloan School of Management, MIT, Cambridge, Massachusetts. Andreas W. Falkenberg: When in Rome Moral maturity and Ethics for International Economic Organizations Journal of Business Ethics, Sept. 2004